first instance the amount expended in wages will be nearly the same whether velvet is purchased, or whether labourers are employed in making a lake. It is, how- ever, contended that if the latter course is adopted a greater amount will ultimately be expended in wages than if velvet is purchased, because with the diminution in the demand for velvet the amount expended in wages in this particular industry will be less than before. Yet the manufacturers of velvet will, as their business is curtailed, be anxious to seek some eligible investment for that portion of their capital which they can no longer employ in their own trade. It consequently follows that although there may be a transfer of capital, yet the aggregate amount of wealth employed as capital, and therefore the amount expended in wages, will be greater, than it would be if wealth, instead of being applied to employing labourers on some unproductive work, were to be used in the purchase of some article of luxury, such as velvet. We cannot help thinking that in thus broadly stating the conclusion two considerations of much importance are lost sight of. In Great loss arises from transfer of capital and labour from one industry to another. the first place, capital cannot be transferred from one industry to another without considerable loss both to the employer and the employed. It must almost invariably happen that the employer will have to bear serious loss if he has to dispose of a portion of his fixed capital, or has to devote his building, machinery, and other plant to another industry ; and a not less serious loss may have to be borne by the labourers if they have to seek employment in some other industry to which they are not accustomed, and are thus deprived of the advantage of their acquired skill. Then again, as previously indicated, it does not necessarily follow that the trader who has to seek a new employment for the portion of his capital which is no longer required for his own business will employ it in home industry. It may very possibly be lent to some foreign government, or be embarked in one of the numerous foreign investments which are constantly attracting an increasing amount of English capital. If this should be the case, it would follow that the amount of capital employed in
English industry would not be increased by using wealth